I am 98% convinced that the way to profitably trade by yourself is like this

Discussion in 'Trading' started by 1a2b3cppp, Feb 12, 2018.

  1. There are a few concepts in trading that I dislike. One is trend trading because I mostly can't stand trend supporters. Yes, I actually mean the people who talk about trend trading. They are either completely clueless, or literal geniuses that cannot explain what they do to anyone in a way that makes sense. Occam's razor.

    Another one is adding to winners. Hey guys, let's give ourselves a less favorable entry price.

    The last one is trailing stops. I feel like this never works out although I have no quantifiable data to back this up.

    My purpose for mentioning these is because I actually think trailing stops might be required which means I'm considering that I was wrong about something.

    To start, you need some way of periodically predicting tops and bottoms. Ignore trend following. This may involve order flow, it may involve the DOM, it may involve something like Urma Blume's (RIP) trade intensity, it may involve volume, it may involve price action. I shall tell you what it doesn't involve, actually. Every indicator (besides volume) that any charting programs have. Once you are able to kind of identify tops and bottoms you start averaging in. It doesn't matter if many of your trades are small, you want to make money, not make maximum money. A trade on 10 shares is fine as long as it's profitable. Since you cannot predict the exact bottom, you build positions as it goes against you (to a point), and then when it starts going in your favor you get a profit. Since you can locate bottoms you are right most of the time and you don't care if you're wrong sometimes.

    Then, you let it go for a bit, figure out how often it goes how many points that requires statistics, and then you close out all but a small bit of your position which you keep on with a trailing stop for those times when you picked the low of the day, or lowest of the day remaining.

    Negatives:

    - you will get flack from ET because you aren't trend following.
    - it requires kind of a big account
    - won't work in Forex because Forex is a bullshit market anyway
     
    Hooter likes this.
  2. Saltynuts

    Saltynuts

    Another negative: How to predict tops and bottoms with any kind of accuracy is not provided.
     
  3. Handle123

    Handle123

    Trading and life as you get older becomes clearer, much. Much of what you post clear to me and achievable, but disagree with adding to winners as have added to some stocks dozen times since 2009. And need protective stops till you get to breakeven plus fees then leave them there, even almost 9 years on some.

    Taken me number of years/decades LOL to find consistent patterns at swing extremes, but you have to remember, different timeframes have different swing lengths. Your short swing high might be my medium term and time to hedge stocks and sell Indexes till my cycle swing low and lift stock hedge and reverse Indexes/ hedged. At some point you think in terms of reducing draw down will make it easier, so less you have to make up.

    Starbucks Time.
     
  4. Adding to losers:

    "Hey guys, I got it wrong, so let's bet some more."

    or

    "Hey guys, I'm lost, so I'm gonna drive faster.

    ...and winning lottery numbers. Don't forget the lottery numbers.
     
    Last edited: Feb 13, 2018
  5. schweiz

    schweiz

    Many times in past I thought: this posting deserves a "trophy".
    But this one is beating the previous "best" one.

    Each person can fill in what throphy and also what the meaning of "best" is in this case.

    What seems clueless for an idiot is in general valuable for a smart(er) person.
    Telling other people are stupid and you are smart is the ultimate proof that the real idiot is you...
     
    Handle123 and DTB2 like this.
  6. There is no way to predict lottery numbers that I know of.
     
  7. This entire forum is a pile of people trying to discuss trend following. The one thing that's worse is trend lines. A guy will post a pic and everyone will be like no you're doing it wrong. But then they post one and other people are like wrong, you're doing it poorly. It's difficult.

    No one can even define trend following, much less apply it. I'm sure they can do it themselves despite never posting statements, but it's impossible to explain it to someone else on a forum. That being said, I am not desiring to talk to someone or learn from someone who cannot technically explain it. I have chatted with one person on this forum who could explain a trend. There is no room for vagueness in a trading discussion.
     
  8. Not with any reliability, no. (See where I'm going with this?)
     
  9. Hotcakes

    Hotcakes

    Averaging down is another form of trend following (call tops/bottoms = end of old trend/start of new one). Any directional bet on the market is by definition a trend following play.....whether the expected move is 10 cents or 100 dollars.

    So to dismiss trend following outright, then admit using it, doesn't make sense. I wouldn't get so caught up in semantics or rigid views.
     
    #10     Feb 15, 2018